Facebook profits increase, but shares fall 10% on costs warning
Social network Facebook has almost doubled profits in its third quarter, but after warning that its spending will increase sharply, shares fell 10%.
A leap in mobile advertising revenue helped Facebook surpass expectations but predicted that spending would increase by up to 75% as it increases investment in its workforce, grows existing products and invests in new areas such as messenging service WhatsApp, virtual reality headset maker Oculus and video.
The social network confirmed profits at $801 million (£496 million) and a 59% jump in total revenues to $3.2 billion (£1.98 billion) over the three months.
Costs increased by 41% during the quarter mainly due to the acquisition of WhatsApp and Oculus Rift.
Mobile advertising revenue made up 66% of total ad revenue in the period, whereas a year ago they accounted for less than half of it.
At the time of its stock market entrance in 2012 Facebook’s mobile ads barely brought in any money at all.
Facebook spent $22 billion in cash and stock to buy the messaging service WhatsApp this year, and approximately $2 billion on virtual reality company Oculus.
It also re-launched Atlas, a tool for marketers to better target people across “devices, platforms and publishers” and to measure how well the ads work.
Facebook had 1.35 billion average monthly users as of 30 September, an increase of 14% from a year earlier.
The number of people checking their Facebook page at least once a day jumped 19% to 864 million.
“This has been a good quarter with strong results,” said Mark Zuckerberg, Facebook founder and chief executive.
This was posted in Bdaily's Members' News section by Clare Burnett .
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